ambitiouswealth NicolasBerggrueN privatebanks macau family offices SEPTEMBER2015 ft.com/wealtH 34 Issue PY ARS Ro Th EM AN dR Il gh AN Ph hAl cK Ex Ng EEN Al EUP Yi UR Ba hUgo gR hAk NE BY RE Pa EP iT SToS TR NT EN wA FT WEALTH CONTENTS SEPTEMBER THENEXT GENERATION Entrepreneur and philanthropistAlexandre Mars wants to changethe wayinwhich people give. Wendy Schmidt, businesswoman and philanthropist, is funding environmental challenges through XPrize. And former “homeless billionaire” Nicolas Berggruen is looking to foster debate around issues of governance as well as philosophyand culture. Theera of passive moneyisover.Inthis, our inaugural edition dedicated to whatwehavetermed “Ambitious Wealth”, we look at howthe nature of wealth is evolving in the second decade of the 21stcentury.Gone are the days of simply writing acheque or having awingofahospital named after you; rich people of the newgeneration want to see their moneyatwork. They want to build the hospitals of the future. Over the coming issues, we will look at thecharacters 10 forming this band of newwealth. Theseare the entrepreneurs who are following in the footsteps of 14 FEATURES LarryPageand Sergey Brin who wrote in their original 10 HOMELESSNOMORE Google founders’ initial public offering letter thattheir The“homeless billionaire” is shareholders should not be surprised if theyplaced on acrusade for ideas on his “smaller bets in areas thatmight seem veryspeculative or next big investment even strangewhen compared to our current businesses”. 14 ART Whatare theglobal challenges thatthese ambitious Most damagetoworks of art individuals face—and where might theyover-reach? Does occurs in transit —experts the wealthmanagement industryunderstand thatmoneyis are increasingly worried getting younger and hungrier? And whatare thedrawbacks of making so much moneyatsuchayoungage? 20 PRIVATEBANKS TheUKfinancial system As ever,wevalue your views, particularly on the new needs achangeinmindsetto direction, so please do drop me an email at theaddress work with entrepreneurs below. 24 PRIZOLOGISTS Thepower of prizes has been Hugo Greenhalgh, Editor rediscovered to encourage [email protected] innovation 32 MACAU YOUR NEXT FT WEALTH As the crackdown on graft deepens, China’smain 23 OCTOBER2015 gambling resortissuffering 4 |FT.COM/WEALTH Special reports editor Leyla Boulton FT Wealth editor Hugo Greenhalgh Deputyeditor Rohit Jaggi Production editor GeorgeKyriakos Artdirector Jonathan Saunders Picture editors Emily Lewis, Michael Crabtree Sub-editors Ruth Lewis-Coste, Philip Parrish Global sales director Dominic Good Global relationship director for banking and finance ValerieXiberras Publishing systems manager Andrea Frias-Andrade OPENINGS Advertising production Daniel Lesar 6 INVESTMENT FOCUS Gold is regaining its glister CONTRIBUTORS 8 THE RICH COLUMN DalyaAlberge is afreelanceartswriter Are good works started to Daniel Ben-Ami is afreelancejournalistand writer atone for sins? 58 Yuri Bender is editor of Professional Wealth Management, an FT publication Emma Boyde is acommissioning editor for FT Special Reports Stephen Foley is theFT’sUSinvestment correspondent 42 INSIGHT HenryFoy is the FT’scentral Europe correspondent Manisha Jha is afreelance journalist 38 EQUITIES JeremyHazlehurst is founder of Business Family Eights tips on how not to Madison Marriage is deputyassetmanagement editor reportacrisis Patrick McGee is lead writer of fastFT Asia Sarah Murray is aregular FT contributor 40 FAMILYOFFICES Feargus O’Sullivan is afreelancejournalist Thefamilyoffice muststep up Andre Rhoden-Paul is an FT intern to evolving demands MatthewVincent is the FT’sdeputycompanies editor LucyWarwick-Ching is the digital and communities editor 42 SCIONS of FT Money Howlarge family businesses prepare to pass on the baton 46 PHILANTHROPY Alexandre Mars is on aepic charityjourney 48 CRIME Reputationsare always at stakeinthe trialsofwealthy and high-profile individuals 50 CORRESPONDENT BLOOMBERG; CHARLIE BIBBY Whybusiness guru Jan R; Kulczyk is Poland’s empire builder 52 FOUNDATIONS Donors recognise the benefits of outsourcing to avoid JEAN-MARIE HEIDINGE S; ambi ti ous complexbackroom burdens GE wealth MA Nico la sB NI erg 54 BOOK REVIEW grueN priv at Rich People Poor Countries, eb anks 24 by Caroline Freund macau RIDGEMA fa PaYiNg mil yo ;B ffi iT BacK ces ES 56 INVESTMENT PASSIONS ENTREPRENEUR AlExANdREMARS wANTSToShAkEUPPhIlANThRoPY SE BY hUgo gREENhAlgh PTEM BE R2 NOBL Passion first wheninvesting 015 ft .c om OT in thebeautiful game /wea ltH SC Issue 34 P; 58 AMBITIOUS WEALTH :A Politics is powering the TO COVERPHOTOGRAPH PASCAL PERICH dreams of migrant children PHO FT.COM/WEALTH|5 INVESTMENT FOCUS LUCY WARWICK-CHING GRAPHIC BY RUSSELL BIRKETT GOLD REGAINSITS GLISTER nvesting in adollar-denominated assetwithnoyieldwas never going to be an easy sell.But withequity markets in turmoil, interest in gold hasbeenrisingsteadily onceagain. I Gold was seen as asafe havenafter the 2008-09 financialcrisis, rising to $1,900anounce in 2011 before falling back to alow of $1,077 in July.Research by BullionVault, apeer-to-peer gold Year-on-year quarterly exchange, reveals nearlyhalf of gold mine production increased and silver retail investors predictthe gold pricewill end 2015 at least 10 3% per cent higher than it wasatthe startofthe year.Whereas the 1970s bull to E14 marketwas driven by inflation, this year it hasbeenuncertainty, particularly over 787tonnes The London the state of the Chinese economy,that Docklands postcode has brought investors back to gold. in Q2 2015 from washome to more In the short term, however, recent gold-owning residents in 2014 events have shown gold to be volatile. than anyother UK postcode As the US economy continuesto (Source: BullionVault) recover,making arise in interestrates more likely,pressureonthe gold price 763t could continue. Trying to predictits level is afool’s game, drivenmore by in Q2 2014 46.6% sentiment than fundamentals. Yetin times of turmoil, gold resurfaces as a of UK gold and potential safe haven, confirming its silver retail investors appealtoinvestors concerned about Recycling predict gold will have the strength andsustainabilityofthe levels fell risen in the 12 months economic recovery. W to December 2015 8% (Source: BullionVault) 422oz Central bankscontinued year on year to to be strong buyersof the largest ever gold gold, accounting for bullion trade made via a smartphone.The sale,in 251t Zurich in May2013,used 137t BullionVault'siPhone app from in Q2 2015,slightly down (Source: BullionVault) on the equivalent quarter 273t last year but up 45%-50% 11% in Q2 2014,resulting of global demand forgold comesfrom on the previous quarter.Itwas in total supply falling China, so aweakerrenminbi makes the 18th consecutivequarter in which commoditiesmoreexpensivetoimport central bankswerenet purchasers (Source: Sharps Pixley) 5% to 1,033t (Source: World Gold Council) (Source: World Gold Council) 6 |FT.COM/WEALTH Performance over fiveyears $1,087 (Gold, cumulativereturns, %toMay 21 2015) Gold price per troy ounce on August 42015, Top3funds afive-week high following yuan devaluation (Source: Sharps Pixley) Smith &Williamson Global Gold &Res A -16.1% BlackRock Gold and General AInc -16.4% 6% BlackRock International Rise in bar and Gold &Gen -16.4% coin demand in China, Q2 2015 Bottom 3funds 42t Junior Gold CAcc -28.4% 30% (Source: World Gold Council) WAYCharteris Gold & Fall in bar and coin PrecMtls Elite IAcc -25.4% demand in India to Amundi FdsEqGlobal 37t Gold MinesFU-C -23.7% Source: Morningstar (Source: World Gold Council) 4.50p Shareprice of Kibo Mining, the London-listed Tanzanian mining, exploration and development company, down 12% oversix months (Source: Bloomberg) …while the US and sawcontinued Europe growth, rising wasup Global jewellerydemand fell 2% 1% China, down and 14% to India, down to 5% 23% to to 26t 15t to 513t 174t 118t (Source: World Gold Council) in Q2 2015 compared with the same period last year FT.COM/WEALTH|7 theRIchcolumn matthewVIncent @MPJVincent PRInCIPLeofGoodWoRkS eople in high places are Management, is an example of generally expected to remain financiers doing good for their own resident (if not tax domiciled) sake, abetted by averydifferent type of on the moral high ground. “conviction politician”. p They do not lie or cheat; UBS’swealth management division theyare only ever,asBritish politician had been directing billions into and diaristAlanClark infamously put philanthropic projects long before its it, “economical with the actualité”.And investment bank briefly allowed Tom even then, if their economybecomes Hayes to earn himself afew million apparent, theyare typically so mortified and the nickname “The Machiavelli thattheyimmediately seek to atone of Libor”. However,its newfund, through tireless good works. managed by social investment John Profumo, likeClark, ajunior specialistResonance, is instead minister,having misled parliament designed to attract“profit-seeking about his familiaritywith aSoviet capital” to projects thattackle poverty attaché’sfemale companion, felt by offering clients both afinancial compelled to resign and spend his return and evidence of ameasurable, next 40 years cleaning the lavatories positive impactonpeople’s lives. at acharityinLondon’s EastEnd. Jamie Broderick, chiefexecutive of That he also, unlikeClark, devoted his the UK wealth management business remaining energies to the alleviation of for UBS, says this matters because the poverty and, unlikeClark, bequeathed available pool of profit seeking